Strengthened levees may have saved New Orleans from catastrophe as hurricane Isaac swept through Louisiana, but residents of outlying areas believe the city's upgraded defenses contributed to the flooding that wrecked their homes.

Outside the protection of the costly new federal shield that rings the city, some flood barriers were overwhelmed and, in scenes reminiscent of Katrina, many people had to be rescued from rooftops as floodwaters submerged their streets.

Some of those whose homes were damaged claimed that New Orleans's upgraded levees had done them more harm than good.

"We've never got caught like this, right there where I was at my house. In Katrina I never had no water – never got none in the house. This time, here, eight feet of water," said Jimmie Hutchinson, of Braithwaite, a town in Placquemines parish that was almost completely swamped when water spilled over a levee that was supposed to protect the community.

Isaac plowed inland on Thursday, causing fresh flooding and power outages in Louisiana and Mississippi and prompting emergency evacuations and warnings, even as New Orleans began its post-hurricane clean-up. About 500 people had to be rescued by boat, and there were at least two deaths.

Officials began releasing a water dam at a lake near the Louisiana-Mississippi border, hoping to ease the pressure. They were also working on a breach in Plaquemines Parish. As Isaac moved north, power lines were downed and trees knocked over.

The region to the north of New Orleans was badly affected, with numerous roads impassable in Slidell and surrounding areas.

Businesses bordering Lake Pontchartrain off Interstate 10 were under several feet of water, cars had been abandoned and mobile homes detached from their foundations. While winds were light, heavy rain continued Thursday afternoon, making driving difficult and hampering attempts to restore electricity.

Residents of Braithwaite,on the east bank of the Mississippi less than 15 miles from central New Orleans, sought refuge in attics and were rescued from rooftops by boat after floods engulfed the area. They were taken to the lesser-affected town of Belle Chasse, a short distance away on the other side of the Mississippi.

Louisiana senator Mary Landrieu said this week that there were political squabbles over funding and location of flood defenses after Katrina and expressed regret that the federal system was not more comprehensive. In some cases, outlying regions have had to organize and fund their own protective measures.

"Unfortunately … low-lying areas outside the federal system, in particular lower Jefferson and Plaquemines parishes [were hit]," she told CNN. The coast's refineries are vital to the US oil industry. "Hurricane Isaac has reinforced for us once again just how vulnerable these critical areas are. We must re-engage the Corps of Engineers on this," she said.

After Katrina, the federal government allocated about $14.5bn to the US Army Corps of Engineers to improve hurricane defenses in New Orleans. The system is largely complete save for some planned drainage improvement work.

St Bernard Parish was badly hit by Katrina but escaped serious damage this time thanks to significant upgrades including doubling the height of its levee and adding concrete walls to replace the old dirt structure. Its defenses were not breached.

Braithwaite's levee, however, is not part of the federal system and is maintained by Plaquemines parish. That will change, after the Army Corps of Engineers signed an agreement earlier this month that will see $1.4bn spent on taking control of non-federal levees and improving them. Work was planned to start in September but the accord came too late for those left homeless this week.

Residents whose homes were badly damaged told the Guardian that they believed the new levees in an adjacent parish had contributed to the unexpected flooding of their neighborhoods as the repelled water was pushed towards lower and weaker defenses.

"They've got floodgates over there that King Kong couldn't get out of, around St Bernard," Jinx Easley said. "We've been fighting over 30 years for the levees."

Jimmie Hutchinson said: "Them levees ain't no good at all. Especially with the new levees around St Bernard, new waters and all that, it just funnels in on us. And our levee's not federalized." Like others in Plaquemines parish, he ignored a mandatory evacuation order. He rode out Katrina with few problems and as a result had not expected a far less powerful hurricane such as Isaac to cause any serious issues.

Inside a YMCA in Belle Chasse that had become a shelter for last-minute evacuees, Zonia Guillot said her house had been similarly affected. It came as a shock because when her family moved the short distance from St Bernard to Plaquemines after Katrina they thought they were moving to a safer area.

"We went through the same thing with Katrina but we were in St Bernard Parish when that happened and we bought on this side thinking that it'd be better," she said.

"I think this was worse because Katrina, we only had four feet of water, we were able to save a lot of things. This time, it went over the house. The levee wasn't strong enough. They put a deep levee for St Bernard and that got us in a hole made of water."

A spokeswoman for the Army Corps of Engineers said that its defenses had been designed to have a "negligible" impact on areas outside the perimeter. "The system built post-Katrina was heavily studied and modeled for that reason, to make sure it wouldn't have any additional impacts to areas outside the system," she said.

A lack of co-ordination among local communities and state and national authorities had been evident until recently, according to Professor Robert A Thomas, director of the Center for Environmental Communication at Loyola University. "Until the beginning of the summer we didn't have what I would call a 'coastal-wide plan'" for protecting at-risk areas, he said.

Thomas added that disparate needs meant it was hard to strike a balance between economic, environmental and cultural forces when deciding how best to protect and exploit the Louisiana coastline. "I'm not saying parishes have made mistakes," he said. "[But] as long as we have parishes making individual decisions that are not linked to the overall plan you are at risk of having failures."